The Indian government regularly issues various schemes to help the citizens of the county and boost the economy to new heights. Stand-Up India and Startup India are two of such schemes that are specifically made for the entrepreneur minds in the country looking to start their own business enterprises.
While they are essentially very similar, they both have very different agendas and target a very specific group of people. One focuses on the minorities of the country and provides them an opportunity to establish their own business ventures and the other inspires the young and creative minds of the country to start their own startups and encourage new business ideologies.
That being said, many people are still confused about both of the schemes and have no idea how they operate. Many also think they both are the same despite the fact that Stand-Up India and Startup India differences are quite prominent.
To get rid of this confusion and doubt, we will be going through each scheme, its criteria, benefits and then compare their differences with each other.
What is the Stand-Up India Scheme?
The government has started the Stand-Up India Scheme to provide a business opportunity to individuals who are either females and/or belong to the SC/ST category and need monetary funds to start their greenfield business ventures. These individuals are provided special loans that can range anywhere from Rs.10 lakhs to Rs. 1 crore at a minimal interest rate.
In this aspect, Stand-Up India and Startup India schemes differ greatly since Stand-Up India scheme recipients are given funds directly instead of allowing them better conditions of establishing ventures. There are several Stand-Up India and Startup India differences like these and their motives differ vastly.
These loans cover up to 3/4th of the project costs of the business ventures as long as the borrower is willing to fund 10% of the costs by themselves. The loan is composite in nature and has a sufficiently long repayment period of 7 years with a moratorium of 18 months. What’s better is that the repayments don’t leave a massive dent in your income because of the minimal interest rate offered by the bank.
However, you can only apply for this scheme if you belong to the SC/ST category and/or are a female entrepreneur who has completed the minimum age of 18 years. You cannot apply for projects other than greenfield projects, i.e., projects that are established on pre-existing land or buildings and do not cause the breaking of buildings. Additionally, you also need to ensure that you do not default in any of the banks or financial institutions.
What is the Startup India Scheme?
While Stand-Up India and Startup India are quite similar in that they both offer economical benefits to entrepreneurs, Startup India is vastly different because of a few reasons. Startup India Scheme is aimed to help individuals or companies that have recently established their own startups by better financing, including tax exemptions, and ensuring the process of creating a startup in India is straightforward and simple.
However, the major takeaway is that the scheme is only applicable to your business if it qualifies as a startup in the government’s eyes.
There are various criteria involved to ensure this and the major ones are –
- Ensuring the company is registered as owned privately by partners or a single individual.
- Ensuring the company has not finished 10 years after being registered.
- Ensuring the company hasn’t had an annual turnover exceeding the set amount of Rs. 100 crore.
- Ensuring the company is working on an innovative product or service and not on something that already exists commercially.
- Ensuring the business is not the result of splitting or reframing a pre-existing business.
Your company will only be considered as a startup if it fulfills the above criteria. But if it does, then you can accept the full benefits of the Startup India Scheme. These benefits consist of getting an 80% refund for your patent costs and the covering of all the fees to obtain the patent. Also, providing the company’s annual turnover does not exceed Rs. 25 crores, they can be liable to zero income tax for a duration of three years starting from the year of incorporation.
How are Stand-Up India and Startup India Schemes Different from Each Other?
Stand-Up India and Startup India may operate on the same principles but the difference between them is really significant. If you want to ensure that you avail the benefits of the right scheme, then it is crucial that you understand Stand-Up India and Startup India differences and make a wise decision.
- The most major difference is that the beneficiaries of each scheme are two completely different groups of people. Stand-Up India focuses on individuals who belong to the minority groups of SC/ST and women categories. On the other hand, Startup India focuses on companies that qualify as a startup and do not generate a large turnover.
- They also provide benefits in different ways. Standup India permits individuals to apply for loans of large amounts ranging from Rs. 10 lakhs to Rs. 1 crore to fulfill 75% of the project costs. Contrarily, Startup India allows startups to get more financing options for their company so that they can fund their project and allow them to have several tax exemptions. They also eliminate all the patent costs that startups are normally charged with.
- Their eligibility criteria differ as well because Stand-Up India only allows people belonging to the caste category of SC/ST and/or females to benefit from the scheme. Contrastingly, the eligibility criteria for the Startup India scheme are for companies that have been just recently founded, don’t have an annual turnover of over Rs.100 crore and are involved in creating innovative products and services.
Meet the Experts for More Support
Both of these schemes, Stand-Up India and Startup India have various aspects to them that can confuse an individual and shy them away from availing their benefits. To ensure this does not happen, you can contact or get in touch with business mentors at Udyami Helplineo get additional expert insights.